Appraisal myths debunked

It is mandated by legal agencies that an appraiser is required to be state-licensed to create appraisals for federally-supported real estate purchases in Florida. Also by law, you have the ability to demand a copy of the finished appraisal report from your lending agency. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: Market value has to be the same as the assessed value of the property.

Fact: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has happened and the assessor does not know about the improvements, or when houses in the vicinity have not been reassessed for an prolonged time.

Myth: The appraised value of a house will be different depending upon if the appraisal is provided for the buyer or the seller.

Fact: The value of the home does not affect the payment of the appraiser; because of this, the appraiser has no preconceived interest in the cost of the home. This means that he will provide services with impartiality and objectivity regardless for whom the appraisal is created.

Myth: Any time market value is found, it should equate to the replacement cost of the home.

Fact: Market value is found by what a willing buyer would be interested in paying a willing seller for a specific property, with neither being under duress to buy or sell. The replacement cost is the dollar amount necessary to reconstruct a property in-kind.

Myth: Appraisers use a formula, like a certain price per square foot, to arrive at the worth of a property.

Fact: There are many different ways that an appraiser will use to make a detailed analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to undesirable facilities and the opinion of value of recently sold comparable houses.

Myth: In a robust economy - when the values of houses in a given area are reported to be increasing by a certain percentage - the values of individual houses in the area can be expected to rise by that same percentage.

Fact: All increase of price is on a one-on-one basis, found by data on relevant conditions and the data of comparable houses. It doesn't matter if the economy is on the rise or declining.

Myth: The property's outside is determinate of the actual worth of the property; it is unnecessary to do an interior inspection.

Fact: There are a multitude of different factors that determine property value; these factors include area, condition, improvements, amenities, and market trends. An outside-only inspection obviously can't provide all of the data needed.

Myth: Because consumers pay for the appraisal when applying for loans to purchase or refinance their home, they legally own their appraisal report.

Fact: Unless a lender releases its interest in the report, it is legally owned by the lending agency that ordered the appraisal. Home buyers have to be given a version of the appraisal report through request as per the Equal Credit Opportunity Act.

Myth: It doesn't matter to consumers what's in the report so long as it meets the necessities of their lender.

Fact: A home buyer should definitely inspect their appraisal report; there might be some questions or some worries about the accuracy of the report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data contained in an appraisal report that could be useful to the consumer in the future, such as the legal and physical description of the property, square footage measurements, list of comparable properties in the neighborhood, neighborhood description and a narrative of current real-estate activity and/or market trends in the area.